The productivity game

There has been a lot of talk about productivity lately. Back in February, Helen Clark told Parliament that New Zealand’s labour productivity was well below the OECD median growth rate.

Most of the gap between New Zealand’s GDP and that of the US is because of our lower rate of labour productivity, she said and a new reference group, drawn from industry nominations is being established to follow through on the workplace productivity report.

But what does increasing productivity mean at the coalface? Banning toilet breaks? Forcing people to code faster?

The New Zealand Workplace Productivity Agenda website has several case studies of companies where workplace productivity has improved. The studies come from a range of companies in various industries, but there are some similarities amongst them, particularly that they all involved staff in some way to get buy-in to whatever initiatives they had to increase productivity.

One of the studies is of Fonterra and talks about how, as part of a manufacturing excellence initiative, the organisation implemented a visual performance measurement (VPM) system.

“[The VPM] is based on identifying key performance indicators for each work team, agreeing with the team on improvement objectives and providing them with visual, short-cycle feedback on their performance against these objectives.”

The system lets people easily see performance, helps provide the motivation for improvements, ensures corrective action can be taken in a timely way and gives teams the information they need to make decisions.

In another study, a Napier piemaker talked to staff about their work practices, the staff themselves identified bottlenecks and production sped up. (As a spin-off, staff turnover reduced from 180% to 14% five years later).

The Vodafone case study says that while senior management were initially involved with work on brand and values, they recognised that other staff had to be involved as well. Staff focus groups helped identify values and, following the focus groups, induction and workshops made sure they were the right values. As a result, changes were made to policies, performance development and the work environment.

Interestingly, while the above focuses on ways of improving or changing things like work systems and culture, often the focus falls on the number of people participating in the workforce, as was shown when Helen Clark talked about getting more women working. And in Europe, there have been moves to increase productivity by increasing weekly work hours.

An article in the Wall Street Journal by Jennifer Sterling says European countries are often “chastised for low economic growth and productivity compared with the US. The American economy grew 3.1% in 2003, compared with 0.5% growth in France.”

She writes that in many European countries, the full-time work week is less than 40 hours.

“An analysis of the average number of hours worked in the US, France, Germany and the United Kingdom, and their economic performances indicates that countries with shorter work weeks tend to have higher productivity levels per worker, but lower productivity for the country as a whole.”

Sterling writes that the European Union Directive grants Europeans a minimum four week stretch of paid leave, with many European countries exceeding that in their own legislation and employment agreements.

Compared with Europe, the US is “virtually unregulated," she says.

“There generally are no federal limits to the amount of hours worked and there is no statutory minimum of paid holidays or time off.”

US law doesn’t even oblige employers to pay staff holiday pay.

“A 2003 Bureau of Labor Statistics survey found 21% of all workers in the private sector didn't have paid holidays or vacation.”

What about your personal productivity? The Productivity Institute has a stress test you can take to see if you need to boost your own productivity.

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